Louisiana AG Busts Pharmacy Kickback Scam

States are becoming more aggressive in pursuing Medicaid fraud cases. A recent case involving Accredo Health Group demonstrates that many states are willing to partner with federal prosecutors to take down illegal Medicaid schemes.

Like a growing number of states, Louisiana has a robust whistleblower law that allows state prosecutors to pay awards to concerned citizens who come forward and report Medicaid fraud. To be eligible for an award, one must have inside or original source knowledge about a fraud involving a government program. Since Medicaid is funded with state and federal tax dollars, it is eligible for awards.

Under the state’s Medical Assistance Programs Integrity Law, whistleblowers are entitled to 15% to 30% of whatever is recovered by the state.

According to a release from Louisiana Attorney General Buddy Caldwell, Accredo Health Group, a Memphis based specialty Pharmacy Company, agreed to settle Medicaid fraud allegations claiming the company received kickbacks for recommending certain drugs.

Kickback arrangements have long been forbidden in the health care field. Congress, the states and Medicaid want to insure that care decisions are not motivated by money. Kickbacks also lead to overuse of medical care.

According to Caldwell, Accredo health was given kickbacks to help boost sales of Exjade, a drug used to treat chronic iron overload in transfusion patients. Accredo allegedly carried out the scheme by having nurses contact Medicare patients directly and encourage continued use of the drug. The more Exjade was sold, the more profits for both Novartis and Accredo.

Many people believe that Medicaid is a victimless crime. It isn’t. Not only are taxpayers ripped off – we pay for the program – in many instances patient safety is endangered. In this case the government claims that the nurses were told to downplay or not discuss the potential serious side effects of the drug.

In announcing the settlement, Attorney General Caldwell said

“This company withheld important information about the side effects of this drug in order to increase its own profits at the expense of Louisiana taxpayers. I will continue to work to protect Louisiana residents and the state’s Medicaid program against fraud of any kind.”

Accredo is a national company with locations in many states. Forty states participated in the settlement. Louisiana’s portion of the recovery is $5,321,935.

Whistleblowers with inside information about fraud are coming forward in record numbers. Generally only the first person to file is eligible to receive an award, however.

In most jurisdictions, receiving an award is predicated on filing a sealed complaint in court detailing the allegations of the fraud. Medicaid officials then are given an opportunity to investigate the claims and can either take over the case or allow the whistleblower’s own lawyer to do so. In some instances, the government can seek to have the complaint dismissed.

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Interested in becoming a whistleblower and helping the fight against Medicaid and Medicare fraud? Give us a call. We have helped our clients receive over $100,000,000.00 in awards.